China suspected of hacking British military payment system, reports say

Officials in Westminster reportedly suspect China was behind a hack affecting a third-party payment system used by the British armed forces.

A spokesperson for the Ministry of Defence said Defence Secretary Grant Shapps would make a statement to Parliament on Tuesday afternoon about the cyber incident.

The statement is not expected to publicly attribute the hack to China, but will warn about hostile states targeting organizations in the country for cyber-espionage. It will also set out a plan to support and protect personnel who may have been impacted.

It is not clear what information was compromised in the incident, which was first reported by Sky News, nor whether the suspicions regarding China are based on technical evidence or simply reflect the expectations of politicians and officials.

An MoD spokesperson told Recorded Future News that the incident affected a payment rather than payroll system. Reports suggest the system, which was operated by a contractor and not part of the MoD’s protected networks, held names and bank details and in some cases personal addresses.

BBC News reported the incident was discovered in recent days and is still being investigated. Currently the investigation “has not found evidence hackers removed data from the system,” although out of precaution the government is acting as if it had.

The Times reported about 270,000 personnel and veterans have been affected. The individuals include regulars and reservists, but not members of the special forces.

Tobias Ellwood, an MP and former soldier, told Sky News he suspected the breach was an act of espionage, with China potentially attempting to identify “financially vulnerable” personnel who could be exploited by financial inducements.

It follows the British government earlier this year accusing Chinese state-affiliated hackers with “carrying out malicious cyber activity targeting UK institutions and individuals important to our democracy.”

That targeting allegedly included last August’s hack of the country’s Electoral Commission, the independent agency overseeing voting eligibility as well as political parties' election financing.

Beijing has consistently denied all allegations of engaging in malicious cyber activity.

Unlike in the United Kingdom and United States, where the governments have avowed their cyber capabilities and published detailed information about how these are regulated and deployed, China does not avow its own hacking capabilities.